An article in the HL Record recently made Above the Law for its somewhat-facetiously titled piece, “Want to save the World? Do Biglaw!” Bill Barlow, the author, essentially argues that HLS grads should go into Biglaw because Biglaw lawyers make 3-4 times as much as public interest lawyers or legal academics, and so can donate more to save starving children.
This salvation-by-private-charity argument is hardly new. I first heard it, unsurprisingly, studying finance at Duke University: perhaps from the same people as Bill, who shares my alma mater. There, some students were arguing that the most ethical option for us was to go into finance and donate some (large?) proportion of our salary to charity. I have to admit, Robin Hood: Men in Suits is a deliciously subversive image, and my Catholic Church would certainly applaud the redistributive impulse.
Still, there are difficulties, and Sima Atri has presented the systemic issues quite nicely, so I won’t repeat them here. Bill responded: “My respected colleague has misdirected her fury away from what is, ultimately, a mathematical question. Is it better to save the lives of 150 living, breathing, people, or to exert the same effort on an unquantifiable, indefinable ‘good’?” But let’s look at the math—it’s not quite so clear.
It seems Bill wants us to make the choices that maximizes the money in charity’s hands. Unfortunately, we HLS students messed that one up from the moment we accepted our admissions here and agreed to three years of nearly $55K/year tuition. While I am racking up approximately $240K of debt after interest, a junior associate at Goldman (with no post-graduate education) is making approximately $140K/year after bonus—$87K take-home even assuming NYC taxes. Traders make even more. Thus, assuming I donate 25% of my income, my three years here not only cost the poor the $60K I’ll be paying back in loans, but also $65K in lost donations if I had been working instead of sitting in the library writing articles like this. At Bill’s rate of 25% of $100K take-home a year from a firm, it would take nearly five years in Biglaw to pay off that deficit.
And our mistake gets worse as we look forward. According to the American Lawyer, an average partner partner at the top-compensating law firm averages $4.8 million gross, while executives at Goldman made around $14 million according to the S&P Capital IQ database Execuucomp. Each banker is good for three lawyers when it comes to charity. Thus, if Bill really believed his argument, he’d follow fellow alum Lloyd Blankfein’s example, and get out of Biglaw and into finance as quickly as possible.
This reconfirms my lesson from 1L Contracts that one should never trust law students with math (so feel free to correct my own in the comments). But it’s deeper than that. It will come as a surprise to no one except maybe other law students that we’re not all that good at making money. We are, however, good at talking about law. In fact, we’ve granted ourselves a legal monopoly to represent people in court in most circumstances. In economics, we call that a comparative advantage: we’re more efficient than pretty much anyone at legally representing others. Similarly, the finance industry has a comparative advantage over lawyers as to donation potential: they make more money. Thus, economics 101 suggests then we should let the bankers maximize their donation potential, and we should stick with law.
There are many reasons to go into Biglaw—many selfless reasons, even. And certainly those who do should certainly donate—hopefully a lot—to charity. But a lawyer who could be doing pro bono or otherwise harnessing the law to help people should not think the best use of his skills to try to save the world through maximizing his income. It is, after all, a simple matter of mathematics.